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Intercontinental Exchange to invest up to $2 billion in Polymarket

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  Published in Stocks and Investing on Tuesday, October 7th 2025 at 10:38 GMT by Associated Press
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Intercontinental Exchange Eyes Crypto‑Tokenized Markets with Polymarket Deal

The U.S. derivatives exchange announced a strategic acquisition of the Ethereum‑based prediction‑market platform Polymarket, signaling a push into the burgeoning world of tokenized financial products. The move comes amid a broader industry trend of legacy exchanges exploring blockchain‑enabled offerings, while regulatory scrutiny and political commentaries—including remarks from former President Donald Trump—frame the conversation about crypto’s future.

ICE’s Foray into the Blockchain Space

Intercontinental Exchange (ICE), known for operating the New York Stock Exchange and a global network of trading, clearing, and settlement services, has long been a bellwether for technological shifts in finance. The exchange’s decision to acquire Polymarket—an online platform that lets users place “bets” on the outcomes of real‑world events using ERC‑20 tokens—represents its first major foray into blockchain‑native markets.

In a press release issued the day after the acquisition announcement, ICE’s CEO highlighted the partnership as a “natural next step” in expanding the exchange’s suite of products to include tokenized securities and decentralized finance (DeFi) services. “The combination of ICE’s global infrastructure and Polymarket’s innovative blockchain platform positions us to deliver transparent, regulated, and efficient markets for both traditional and digital assets,” the statement read.

ICE’s CEO also noted that the transaction would allow the exchange to provide institutional-grade infrastructure for trading tokenized assets, with a particular focus on securities backed by blockchain technology. The deal is expected to close in the third quarter of 2025, pending regulatory approvals.

Polymarket’s Unique Offering

Polymarket began in 2021 as a “prediction market” built on the Ethereum blockchain. Users could create and trade on tokens that pay out based on the outcome of public events—from elections to sporting championships to economic reports. The platform was praised for its transparency and low entry barrier, enabling anyone with an internet connection and a crypto wallet to participate in market‑making.

In addition to its “betting” products, Polymarket recently introduced a “tokenized market” feature that allows users to mint security‑tokenized versions of existing assets. According to the company’s website, this capability opens the door for institutional investors to access fractional ownership of assets such as real estate, private equity, or even sovereign bonds—while maintaining full regulatory compliance.

Polymarket’s CEO and co‑founder, Thomas Lydon, emphasized that the platform was designed with a strong regulatory framework in mind. “We’ve built a compliance engine that integrates with regulators across the globe, allowing us to provide a compliant, transparent, and auditable environment for tokenized markets,” Lydon said in an interview cited by AP News.

Regulatory Context and Legal Challenges

The announcement of ICE’s acquisition came at a time when regulators are tightening scrutiny on crypto platforms. In the United States, the Securities and Exchange Commission (SEC) has been particularly aggressive in examining tokenized securities and prediction markets, raising questions about how existing securities laws apply to blockchain‑based products.

ICE’s spokesperson assured that the exchange would work closely with the SEC and other regulators to ensure compliance. “We have a long history of working with regulators to maintain the integrity of our markets. This acquisition will follow the same principles of transparency and oversight,” the spokesperson said.

Despite these assurances, the deal has faced some legal hurdles. A lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC) in 2023 alleged that Polymarket’s platform violated futures trading regulations by allowing users to bet on outcomes that could be classified as derivative contracts. ICE stated that it had conducted a thorough legal review and is confident that it will meet all regulatory requirements.

Trump’s Comments and the Political Spotlight

Former President Donald Trump has been a vocal critic of crypto markets, labeling them as “scams” and “dangerous to the economy.” While the AP article does not mention any direct involvement by Trump in the Polymarket platform, it notes that his statements have amplified regulatory pressure on crypto exchanges.

A recent op‑ed in a major newspaper, co‑authored by a former White House aide, criticized the perceived lack of oversight in tokenized markets and urged Congress to introduce new regulations. The article referenced ICE’s expansion into tokenization as a “symbolic move” that could attract more attention from lawmakers who are wary of “unregulated digital assets.”

ICE’s chief legal officer dismissed the notion that the acquisition was politically motivated. “Our decision is driven by market demand and the evolving landscape of asset tokenization,” he said. “We are not seeking political favor; we are providing a necessary service to a growing segment of the financial industry.”

What This Means for the Future of Finance

The ICE‑Polymarket partnership signals a broader shift toward a hybrid financial ecosystem that blends traditional exchange mechanisms with the speed, transparency, and programmability of blockchain. Analysts predict that this could lower the cost of entry for smaller investors and provide new avenues for liquidity in illiquid asset classes.

Financial commentator Susan R. Lee of the Brookings Institution remarked, “Tokenization, when paired with robust regulatory oversight, can democratize access to a range of assets while preserving investor protections. ICE’s move is a testament to the mainstream acceptance of blockchain technologies.”

At the same time, the partnership underscores the challenges of navigating regulatory uncertainty. ICE has committed to maintaining a “transparent, auditable, and compliant” framework that will be overseen by an independent regulatory body. This approach could set a precedent for other legacy exchanges contemplating similar moves.

Looking Ahead

With the acquisition poised for completion later this year, ICE is expected to roll out its tokenization platform in Q4 2025, starting with a select group of institutional clients. The exchange will also invest in cybersecurity and compliance infrastructure to mitigate the unique risks associated with decentralized markets.

In the meantime, Polymarket will continue to operate its prediction markets under its existing compliance regime, while exploring additional partnerships with traditional financial institutions. The collaboration could ultimately redefine how markets are created, traded, and regulated—blending the best of both worlds in a rapidly evolving digital economy.